Circular No. 105/16/95-CX
dated 2/3/95
 F.No. 209/4/95-CX.6
 Government of India
Ministry of Finance
Department of Revenue, New Delhi

Subject : Interpretation of Explanation II to Rule 13 of the Central Excise Rules, 1944- Instructions reg.

I am directed to say that doubt has been raised as to whether the said rules provide for manufacture – in -bond of only excisable goods or also of non-excisable goods. Another doubt has been raised whether duty is required to be paid on such intermediate goods or packing material which are used for manufacture- in -bond of export goods, or for packing the latter, in terms of Rule 13(1)(b), Both these matters have been examined in the Board.

2. It is clarified that Rule 12(1)(b) as well as Rule 13(1)(b), while referring to the manufacture-in-bond do not restrict the facilities envisaged there under only to cases where excisable goods are manufactured-in-bond. These provisions would also apply to those cases where goods manufactured -in -bond for export are not excisable.

3. It is also clarified that under Rule 13(1)(b), intermediate goods as well as packaging material on which duty of excise is payable, can be removed without payment of duty for manufacture-in-bond of any goods which are to be exported. Such export goods can be excisable as well as non-excisable. Similarly, removal of a material in terms of Rule 13(1)(b) for manufacture of packing, used for packing export goods and exported therewith is also permitted. Further, the packing material so manufactured in bond Rule 13(1)(b) and used for packing export goods and exported therewith is not liable to excise duty.

4. Foregoing, however are subject to the manufacture exporter following the terms and conditions as laid down by Collector in terms of said Rules.

(I.P. Lal)
Deputy Secretary to the Govt. of India

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